Calculate income replacement coverage to protect your paycheck if you cannot work. Find out how much disability insurance you need based on your monthly income and existing benefits, and estimate your annual premium.
Existing coverage includes employer long-term disability (LTD), SSDI, or any individual disability policy you already pay for. The standard income replacement target is 60% of your pre-tax monthly income.
Profile: $5,000/month income, no existing disability coverage
Calculation: $5,000 × 60% − $0 = $3,000
Profile: $5,000/month income, $1,000/month existing employer LTD coverage
Calculation: $5,000 × 60% − $1,000 = $2,000
Profile: $6,000/month income at the 60% standard, no existing coverage
Calculation: $6,000 × 60% − $0 = $3,600
Note: These examples are for illustration purposes only. Actual disability insurance needs vary based on personal circumstances, occupation, health, and policy terms. Always consult a qualified financial professional.
Monthly Income = Your current gross (pre-tax) monthly income
60% = Standard income replacement target used by most advisors
Existing Monthly Coverage = Employer LTD, SSDI, or other disability benefits (subtracted)
Premium Rate = Typically 0.5%–2% of annual income (default 1%)
Provide your gross monthly income before taxes. The calculator applies the standard 60% income replacement target, which is designed to replace the portion of your paycheck you actually take home and spend.
Enter any disability benefits you already have, such as employer long-term disability insurance, Social Security Disability Insurance (SSDI), or an individual policy. These are subtracted so you don't over-insure and overpay.
Choose a premium rate between 0.5% and 2% of your annual income. The default 1% is typical for a healthy professional. Your actual rate depends on age, health, occupation class, elimination period, and benefit duration.
The 60% income replacement target works because disability benefits are often paid with after-tax dollars or tax-free premiums, and your work-related expenses disappear when you stop working. Here's how different factors affect your numbers:
Your income is your most valuable asset — for most people, it's worth more than their home, car, and investments combined. Yet disability insurance is one of the most overlooked forms of financial protection. The Social Security Administration estimates that more than 1 in 4 of today's 20-year-olds will become disabled before reaching age 67, and a disability lasting three months or longer is far more common than most people realize.
The widely accepted standard is to replace about 60% of your pre-tax monthly income. This target works because your disability benefits replace the income you actually spend, not the portion withheld for taxes and work-related costs. If your disability insurance premiums are paid with after-tax dollars, your benefits are tax-free, making 60% coverage feel like closer to 75–80% of your take-home pay.
Start with the 60% rule, then subtract any coverage you already have — employer long-term disability, Social Security Disability Insurance, or personal policies. The result is the gap you need to fill with an individual disability policy. Review this number whenever your income changes significantly, since coverage that was adequate at $5,000/month may leave you short at $8,000/month.
Own-occupation vs. any-occupation. An own-occupation policy pays benefits if you cannot perform the duties of your specific occupation, even if you could work in another field. An any-occupation policy only pays if you cannot work in any occupation for which you're reasonably suited by education and training. Own-occupation is significantly more protective — and more expensive — and is especially important for surgeons, attorneys, and other specialized professionals.
Elimination period. This is your waiting period before benefits begin — commonly 30, 60, or 90 days. A longer elimination period lowers your premium because you bear more of the initial risk, so it's a key lever for fitting disability coverage into your budget. Just be sure you have enough emergency savings to cover the gap.
SSDI waiting period. Social Security Disability Insurance has its own 5-month waiting period before benefits start, and you must be disabled for at least 12 months or expected to die to qualify. After 24 months of SSDI benefits, you become eligible for Medicare. Private disability insurance and SSDI can work together, but SSDI approval is difficult and can take months or years — never rely on it as your only protection.
Many workers assume their employer-provided long-term disability insurance is enough, but employer LTD policies typically cover only about 60% of base salary and are subject to caps — often $5,000 to $10,000 per month. That means high earners can face a significant coverage gap. Employer LTD also usually ends when you leave or lose your job, and group policies are not portable.
An individual disability policy is owned by you, stays with you between jobs, and can be tailored with riders like cost-of-living adjustments, residual benefits for partial disability, and future purchase options that let you increase coverage as your income grows. A common strategy is to layer individual coverage on top of your employer policy to close the gap between 60% of income and the employer's cap — exactly what this calculator helps you identify.
Also consider the benefit duration. Employer policies often pay for only 2 to 5 years or until age 65. If your savings and other assets can't carry you through a long-term disability, look for a policy with benefits to age 65 or longer, and keep the elimination period as long as your emergency fund can comfortably support.
⚠️ General Estimate Only: This disability insurance calculator provides a general estimate based on the information you provide. Results are estimates, not quotes — actual coverage and premiums vary by insurer, occupation class, health, age, state laws, and policy terms. It is not a substitute for professional financial advice. Always consult with a licensed insurance professional and financial advisor to determine the appropriate type and amount of coverage for your specific situation.
When purchasing disability insurance, consider factors such as the financial stability of the insurer, the definition of disability, benefit duration, elimination period, riders, and exclusions. Review your coverage periodically — especially after major life events such as a job change, income increase, marriage, or the birth of a child.